AutoBeta(AutoBeta.net)08/24 Report--

Under the influence of multiple factors such as the macroeconomic environment and policy changes in the automobile industry, sales in the domestic automobile market have declined significantly, and the market competition has become increasingly fierce. A few days ago, Huayu Automotive Systems Co., Ltd. (referred to as "Huayu Automobile") released its annual performance report in the first half of 2019. Data show that in the first half of the year, the operating income of Huayu Automobile reached 70.563 billion yuan, down 13.55 percent from the same period last year; the net profit belonging to shareholders of listed companies was 3.364 billion yuan, down 29.53 percent from the same period last year; and the net profit belonging to shareholders of listed companies after deducting non-recurring profits and losses was 2.809 billion yuan, down 15.88 percent from the same period last year.

Huayu Automobile said that it was mainly due to the completion of the 50% equity acquisition of the former Shanghai Xiaomi Automobile Light Co., Ltd. [now renamed Huayu Vision Technology (Shanghai) Co., Ltd.] in the same period last year. The one-time premium brought about by the equity acquisition transaction was recognized as investment income in the same period last year.

After excluding the non-recurrent gains and losses and other non-recurrent gains and losses arising from the equity acquisition transaction, the company's net profit after deducting non-recurrent gains and losses belonging to shareholders of the listed company in 2019 decreased by 15.88% compared with the same period last year.

In addition, in the face of the continuing downturn in the domestic automobile market, Huayu Automobile closely tracks the monthly production and marketing changes of major vehicle customers, balances production plans, optimizes production scheduling, responds to fluctuations in supply and demand, and at the same time further reduces expenses, reduces investment in capacity expansion projects, ensures the safety of operating funds, strives to overcome the adverse impact of the market downturn on Huayu Automobile operation, and ensures the smooth operation of various business sectors at home and abroad.

Industry insiders said that thanks to the layout at home and abroad, the revenue performance of Huayu Automobile is better than that of the domestic industry. The output of the domestic industry and SAIC fell by 17.0% and 20.8% respectively, while the domestic business of Huayu Automobile fell by 17.1%, which basically remained robust. In the first half of 2019, the overseas business revenue of Huayu Automobile was 14.68 billion, down 4.3% from the same period last year, and the domestic business was 51.731 billion, down 17% from the same period last year. The share of overseas business increased to 22.1%, mainly because the decline in car demand in overseas markets was lower than that in China.

In terms of new customers, Huayu Automobile has made breakthroughs in luxury cars, Japanese cars and Tesla. Yanfeng interior decoration has been fixed by BMW-Mercedes-Benz, while Huayu Vision and Bosch steering have successfully entered Guangfeng and Guangben respectively. Yanfeng Biou, Secco and Yanfeng Andotuo have won a number of product points of Tesla.

The data show that Huayu Automobile's main business includes the design, development and sales of spare parts and assemblies of transportation vehicles and construction machinery, such as automobiles. At present, Huayu Automobile has a market capitalization of 75.098 billion yuan, ranking second in the auto parts industry. On the day of the report, the market capitalization increased by 5.96%, far exceeding the first Weichai Power in the industry, and the third Fuyao Glass in the industry fell slightly by 1.01%.

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